Mid-day Update… Is a big leg brewing?

REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.

Persistently overbought 3-minute RSI kept alive this morning’s rally. It ultimately came within 1 tick of the 2365.00-2366.00  renewed bias-up target. Close enough for hand shoes and horse grenades. But a loose end, if left outstanding.

The high doesn’t require being retested. The 3-minute RSI’s persistence had already broken, dipping momentarily out of overbought territory. And its 1-minute RSI was at best on the cusp of being overbought. But the burden of proof is on sellers, because the open’s rally wasn’t rejected through two timing windows — a downdraft could still  recover.

In fact, there was a downdraft. It hasn’t extended, nor has it recovered. The highs formed a head & shoulders that triggered a sell signal under 2360.25, and met its minimum 2357.25 target down to 2356.00. A relatively narrow 2-point range between 2358.00-2360.00 defined the noon hour.

Breaking higher would set-up an important test of the morning’s high. Closing above it could turn this rally’s slope exponential. More exponential. Breaking back under “lower prior highs” would trigger a steep and deep drop, albeit only temporarily.